Australia’s major superannuation funds have posted positive returns for the seventh consecutive year, according to Chant West, although this year’s results are lower than the previous three years.
In a note to investors, Chant West said the average median growth fund saw returns of 3 per cent, significantly below the last three years, which included a high of 15.6 per cent for 2012/13 and a low of 9.8 per cent in 2014-15.
Chant West director Warren Chant said the reduced returns shouldn’t be a concern to members however, as the cumulative return since the GFC sits at around 80 per cent, or 8.8 per cent per annum.
“That’s about 6.5% above the annual rate of inflation, so it’s comfortably ahead of the typical longer-term return objective for these funds which is to beat inflation by between 3% and 4% annually,” he said.
Mr Chant said this year’s positive returns in the face of “a very uncertain” global economy were indicative of diversification at play”.
“These funds are so well diversified across a wide range of growth and defensive asset sectors, including alternative and unlisted assets, they can successfully smooth out returns when listed share markets are struggling,” he said.
Stimulate new ideas. Stimulate new thinking. Top up your CPD and hear from industry experts with InvestorDaily’s Knowledge Centre. Keep up to date with the latest trends and reforms, all while adding to your CPD. Explore the knowledge centre Knowledge Centre now.
Despite the Australian economy’s ongoing rapid recovery, an Australian equity head believes GDP growth will “fade” in 2022. ...
The next financial year could see a “new record year” for dividends as the Australian economy continues its recovery from the COVID-19 p...